On January 1, 2020, Bridgeport Company purchased 9% bonds having a maturity value of $290,000, for $313,782.32. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. * Your answer is incorrect. Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Date 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 $ Cash Received Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method DOOOOO 20300 20300 20300 20300 20300 $ Interest Revenue 10000 21964.76 21848.23 21739.85 21639.06 21545.33 21458.16 $ Premium Amortized 1664.76 1548.23 1439.85 1339.06 1245.33 1158.16 $ Carrying Ar of Bonc 000000 3 3 3 3 3

On January 1, 2020, Bridgeport Company purchased 9% bonds having a maturity value of $290,000, for $313,782.32. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. * Your answer is incorrect. Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Date 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 $ Cash Received Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method DOOOOO 20300 20300 20300 20300 20300 $ Interest Revenue 10000 21964.76 21848.23 21739.85 21639.06 21545.33 21458.16 $ Premium Amortized 1664.76 1548.23 1439.85 1339.06 1245.33 1158.16 $ Carrying Ar of Bonc 000000 3 3 3 3 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2020, Wildhorse Company purchased 6% bonds, having a maturity value of $550,000 for $475,253. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2027, with interest paid on June 30 and December 31 of each year. Wildhorse Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $476,000 2023 2021 $471,000 2024 $466,000 2022 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, eg. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for…
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On January 1, 2025, Flounder Company purchased 11% bonds having a maturity value of $312,000 for $336,270.95. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Flounder Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $333,900 2028 $320,900 2029 2026 2027 $320,000 $321,800 $312,000 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. (c) Prepare the journal entry to record the recognition of fair value for 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No…
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